FarmVille creator Zynga Inc (NASDAQ:ZNGA) beat analyst expectations last night by reporting a profit of 1 cent per share. The Street was looking for a loss of 4 cents. Despite the minor triumph, the stock took a hit after-hours, at one point dropping more than 10% to under $3 a share. Investors were disappointed by a warning for the current quarter and a substantial drop in the number of people using its online games. For casual investors the real shock was that anyone was still playing FarmVille or Words With Friends at all. It seems a triumph of persistence that Zynga still has 253 million monthly users, even if that number has dropped almost 25% since peaking in at 331 million in Q3 2012.
Jon Najarian, cofounder of optionMONSTER.com says the company is basically trying to stay alive long enough to get a piece of the online gambling business, which is slowly being legalized in the U.S. Though the company won’t talk about it much, they did set up an online casino of sorts in the U.K. last quarter. As Najarian sees it, “That’s the test tube for what they’re going to do in the U.S.”
You can see the full “Breakout” interview below:
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